Despite a cold wave and rainfall in many north Indian states, no major crop losses have been seen as of now
Harvesting of rabi crops started this month and seasonal supply pressure is gradually building in these commodities. Accordingly, during the last fortnight, prices have plunged.
Prices of mustard, the largest-grown rabi oilseed, however, recovered on reports of unfavourable weather in the second-largest-growing state, Madhya Pradesh. Despite a cold wave and rainfall in many north Indian states, no major crop losses have been seen as of now.
Most rabi commodities (chana, jeera, mustard seed, coriander) along with long-duration kharif crops (turmeric, castor seed) will decline next month as harvesting gathers pace; the extent of losses, though, may vary. Meanwhile, the weather will still have a critical role to play as standing crops may not bear heavy rains and obstruct harvesting.
The new jeera crop arrivals in the market have just commenced and the 2018-19 crop is expected to be more or less the same as last year. Late sowing this season led to the delayed start to harvesting. The same would peak in March.
Overseas sales are subdued at present while stocks are higher than last year. Accordingly, we don't see any major factor that could push jeera higher, except unfavourable weather in the two major growing states (Gujarat and Rajasthan). Weather-related price spikes may come from time to time but the major short-term trend would be bearish.
A month is left for mustard harvesting to commence from the leading producing state -- Rajasthan. Nonetheless, new crop arrivals in the market would commence in the next 10-15 days from other growing states, including West Bengal, Bihar and Assam.
Moreover, if the weather is favourable in the next one month, mustard seed output in the 2018-19 season would be the highest of the last four years. Mustard seed would thus be bearish due to the optimistic crop picture and harvesting season ahead.
Chana, castor seed and coriander will also trade with a negative bias in the short term, but we may not see much of a fall in these commodities as the sown areas under chana and coriander have declined considerably, while castor-seed yield has been affected by drought in the largest producing state, Gujarat. In fact, these commodities would be bullish in the long term.
The author is Head - Commodity Research & Advisory, Anand Rathi Commodities.Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on Moneycontrol are their own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.